CM Enterprises estimates that it takes, on average, 7 days for their customers' payments to reach them, 1 day for the payments to be processed and deposited by their bookkeeping department, and 3 more days for the check to clear once they're deposited. What is their collection float?
A) 11 days
B) 10 days
C) 8 days
D) 7 days

Question

Quizplus · Accepted Answer

The collection float is the total time taken from when a payment is mailed by a customer until the funds are available for use. It includes the mailing time (7 days), processing time (1 day), and clearing time (3 days), totaling 11 days.

CM Enterprises Estimates That It Takes, on Average, 7 Days